Supply Chain Revenue Sharing Contract under Consignment with Supplier′s Sales Effort

The consignment contract based on revenue sharing with supplier′s sales effort was studied.The retailer offers the supplier a revenue sharing contract before observing the demand of the supplier′s product,and then the supplier decides on the delivery quantity and effort level for the product.A mathematical model is proposed and it is proved that the supply chain can′t be coordinated through this type of contracts.By assuming that the demand for the product is uniformly distributed,it is proved that the decentralized channel has a unique optimal solution of revenue sharing portion,also the uniqueness of the retailer′s optimal revenue sharing portion is proved,and the former is always smaller than the latter.Then two types of contracts that will induce coordination are presented,and finally the numerical examples are conducted to study the efficiency of the decentralized channel by assuming the demand is normally distributed.